Exhibit 10.1


 


THINKORSWIM GROUP INC.


SECOND AMENDED AND RESTATED 2001 STOCK OPTION
PLAN


 


1.             Purpose.  The purpose of this Stock Option Plan (“the
Plan”) is to further the interests of the Company, its subsidiaries and its
stockholders by providing incentives in the form of stock options to key
employees, directors, or consultants who contribute materially to the success
and profitability of the Company and its subsidiaries.  The grants will recognize and reward outstanding
individual performances and contributions and will give such persons a
proprietary interest in the Company, thus enhancing the personal interest in
the Company’s continued success and progress. 
This Plan will also assist the Company and its subsidiaries in
attracting and retaining key employees, directors, and consultants.  The options granted under this Plan may be
either Incentive Stock Options, as that term is defined in Section 422 of
the Internal Revenue Code of 1986, as amended, or nonstatutory options.


 


2.             Definitions.  The following definitions shall apply to this
Plan:


 


(a)           “Board” means the board
of directors of the Company.


 


(b)           “Cause” means “cause”
as defined in any employment or consulting agreement then in effect between the
Optionee and the Company or any Subsidiary or if not defined therein, or if
there shall be no such agreement, (i) the Optionee’s embezzlement,
misappropriation of corporate funds, or other material acts of dishonesty, (ii) the
Optionee’s commission or conviction of any felony, or of any misdemeanor
involving moral turpitude, or entry of a plea of guilty or nolo contendere to
any felony or misdemeanor, (iii) engagement in any activity that the
Optionee knows or should know could harm the business or reputation of the
Company or a Subsidiary, (iv) the Optionee’s material failure to adhere to
the Company’s or a Subsidiary’s corporate codes, policies or procedures as in
effect from time to time, (v) the Optionee’s continued failure to meet
performance standards as determined by the Company or a Subsidiary, (vi) the
Optionee’s violation of any statutory, contractual, or common law duty or
obligation to the Company or a Subsidiary, including, without limitation, the
duty of loyalty, or (vii) the Optionee’s material breach of any
confidentiality or non-competition covenant entered into between the Optionee
and the Company or a Subsidiary.  The
determination of the existence of Cause shall be made by the Committee in good
faith, which determination shall be conclusive for purposes of this Plan.


 


(c)           “Change of Control”
means any of the following events:


 


(i)            The acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act (a “Person”), of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or
more of either (A) the then outstanding shares of Common Stock of the
Company or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors; provided, however, that the following acquisitions shall not
constitute a Change of Control:  (I) any
acquisition by the Company or (II) any acquisition by any 


 


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employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation
controlled by the Company; or


 


(ii)           Individuals who, as of
the effective date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the effective
date of the Plan whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act)
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or


 


(iii)          Approval by the
stockholders of the Company of a complete liquidation or dissolution of the
Company or the sale or other disposition of all or substantially all of the
assets of the Company.


 


(d)           “Code” means the
Internal Revenue Code of 1986, as amended.


 


(e)           “Committee” means the
Compensation Committee of the Board which shall consist of two or more
directors of the Company appointed by the Board.


 


(f)            “Common Stock” means
the Common Stock, par value $0.01 per share, of the Company or such other class
of shares or securities as to which the Plan may be applicable, pursuant to Section 13
herein.


 


(g)           “Company” means
thinkorswim Group Inc., a Delaware Corporation, formerly known as Investools
Inc.


 


(h)           “Continuous Service”
means the absence of any interruption or termination of employment with or
service to the Company or any parent or subsidiary of the Company that now
exists or hereafter is organized or acquired by or acquires the Company.  Continuous Service shall not be considered
interrupted in the case of sick leave, military leave, or any other leave of
absence approved by the Company or in the case of transfers between locations
of the Company or between the Company, its parent, its subsidiaries or its
successors.


 


(i)            “Date of Grant” means
the date on which the Committee grants an Option.


 


(j)            “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended.


 


(k)           “Exchange Act” means
the Securities Exchange Act of 1934, as amended.


 


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(l)            “Employee” means any
person employed on an hourly or salaried basis by the Company or any parent or
subsidiary of the Company that now exists or hereafter is organized or acquired
by or acquires the Company.


 


(m)          “Fair Market Value”
means (i) if the Common Stock is not listed or admitted to trade on a
national securities exchange and if bid and ask prices for the Common Stock are
not furnished through NASDAQ or a similar organization, the value established
by the Committee, in its sole discretion, for purposes of the Plan; (ii) if
the Common Stock is listed or admitted to trade on a national securities
exchange or a national market system, the closing price of the Common Stock, as
published in the Wall Street Journal, so listed or
admitted to trade on such day or, if there is no trading of the Common Stock on
such date, then the closing price of the Common Stock on the next preceding
date on which there was trading in such shares; or (iii) if the Common
Stock is not listed or admitted to trade on a national securities exchange or a
national market system, the mean between the bid and ask price for the Common
Stock on such date, as furnished by the National Association of Securities
Dealers, Inc. through NASDAQ or a similar organization if NASDAQ is no
longer reporting such information.


 


(n)           “Incentive Stock Option”
means a stock option, granted pursuant to either this Plan or any other plan of
the Company, that satisfies the requirements of Section 422 of the Code
and that entitles the Optionee to purchase stock of the Company or in a
corporation that at the time of grant of the option was a parent or subsidiary
of the Company or a predecessor corporation of any such corporation.


 


(o)           “Non-Employee Director”
means any member of the Board who is not an Employee.


 


(p)           “Nonstatutory Option”
shall have the meaning as used in Section 9 herein.


 


(q)           “Option” means a stock
option granted pursuant to the Plan.


 


(r)            “Option Period” means
the period beginning on the Date of Grant and ending on the day prior to the
tenth anniversary of the Date of Grant or such shorter termination date as set
by the Committee.


 


(s)           “Optionee” means an
Employee, Non-Employee Director, or consultant who receives an option.


 


(t)            “Outside Director”
means a member of the Board serving on the Committee who satisfies the
requirements of Section 162(m) of the Code.


 


(u)           “Parent” means any
corporation which owns 50% or more of the voting securities of the Company.


 


(v)           “Plan” means this
Amended and Restated 2001 Stock Option Plan.


 


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(w)          “Share” means the Common
Stock, as adjusted in accordance with Section 13 of the Plan.


 


(x)            “Subsidiary” means any
corporation 50% or more of the voting securities of which are owned directly or
indirectly by the Company at any time during the existence of this Plan.


 


3.             Administration.  This Plan will be administered by the
Committee.  Each member of the Committee
must be an Outside Director.  A majority
of the full Committee constitutes a quorum for purposes of administering the
Plan, and all determinations of the Committee shall be made by a majority of
the members present at a meeting at which a quorum is present or by the
unanimous, written consent of the Committee.


 


The Committee has the exclusive
power to select the Employees, Non-Employee Directors, or consultants who shall
receive an award under this Plan, to establish the terms of the Options granted
to each Employee, Non-Employee Director, or consultant, and to make all other
determinations necessary or advisable under the Plan.  The Committee has the sole and absolute
discretion to determine whether the performance of an eligible Employee,
Non-Employee Director, or consultant warrants an award under this Plan, and to
determine the amount of the award.  The
Committee has full and exclusive power to construe and interpret this Plan, to
prescribe and rescind rules and regulations relating to this Plan, and
take all actions necessary or advisable for the Plan’s administration.  Any such determination made by the Committee
will be final and binding on all persons. 
A member of the Committee will not be liable for performing any act or
making any determination in good faith.


 


4.             Shares Subject to
Option.  Subject to the provisions of
Section 13 of the Plan, the maximum aggregate number of Shares that may be
optioned and sold under the Plan shall be 12,000,000.  Such Shares may be authorized but unissued,
or may be treasury Shares.  If an Option
shall expire or become unexercisable for any reason without having been
exercised in full, the unpurchased Shares that were subject to the Option
shall, unless the Plan has then terminated, be available for other Options
under the Plan.  The maximum number of
Shares with respect to which Options may be granted each calendar year to an
Employee shall be 2,000,000, subject to adjustment in accordance with Section 13
hereof.


 


5.             Employee
Participation.


 


(a)           Eligible Employees.  Every Employee, as the Committee in its sole
discretion designates, is eligible to participate in this Plan.  The Committee’s award of an Option to an
Employee in any year does not require the Committee to award an Option to that
Employee in any other year.  Furthermore,
the Committee may award different Options to different Employees.  The Committee may consider such factors as it
deems pertinent in selecting Employees and in determining the number of Shares
underlying their Option, including, without limitation: (i) the financial
condition of the Company or its Subsidiaries; (ii) expected profits for
the current or future years; (iii) the contributions of prospective
Employees to the profitability and success of the Company or its Subsidiaries;
and (iv) the adequacy of the Employee’s other compensation.  Employees may include persons to whom stock,
stock options, or other benefits 


 


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previously were granted under this or another
plan of the Company or any Subsidiary, whether or not the previously granted
benefits have been fully exercised.


 


(b)           No Right of
Employment.  An Optionee’s right, if
any, to continue to serve the Company and its Subsidiaries as an Employee will
not be enlarged or otherwise affected by his designation as an Optionee under
this Plan, and such designation will not in any way restrict the right of the
Company or any Subsidiary, as the case may be, to terminate at any time the
employment of any Optionee.


 


(c)           Non-Transferability.  No Option granted to Employees by its terms
shall be transferred, assigned, pledged or hypothecated by the Optionee during
his lifetime, whether by operation of law or otherwise, or be made subject to
execution, attachment or similar process, otherwise than by will or by the laws
of descent and distribution or pursuant to a qualified domestic relations order
as defined by the Code or Title I of ERISA, or the rules thereunder, and
shall be exercised during the lifetime of the Optionee only by him.  The Committee may grant Options that are
transferable, without payment of consideration, to immediate family members of
the Employee or to trusts or partnerships for such family members; the
Committee may also amend outstanding Options to provide for such
transferability.


 


6.             Non-Employee
Director and Consultant Participation.


 


(a)           Grants of Awards.  The Committee shall have full discretion to
grant Options to Non-Employee Directors and consultants at such times as it
deems appropriate, to determine the number of Shares underlying such Options,
and to determine the other terms and provisions thereof subject to the other
terms of the Plan.


 


(b)           Non-Transferability.  No Option granted to Non-Employee Directors
or consultants by its terms shall be transferred, assigned, pledged or
hypothecated by the Optionee during his lifetime, whether by operation of law
or otherwise, or be made subject to execution, attachment or similar process
otherwise than by will or by the laws of descent and distribution or pursuant
to a qualified domestic relations order as defined by the Code or Title I of
ERISA, or the rules thereunder, and shall be exercised during the lifetime
of the Optionee only by him.  The
Committee may grant Options that are transferable, without payment of
consideration, to immediate family members of the Non-Employee Director or
consultant, or to trusts or partnerships for such family members; the Committee
may also amend outstanding Options to provide for such transferability.


 


7.             Option
Requirements.  Each Option granted
under this Plan shall satisfy the following requirements.


 


(a)           Written Option.  An Option shall be evidenced by a written
instrument specifying (i) the number of Shares that may be purchased by
its exercise, (ii) the intent of the Committee as to whether the Option is
to be an Incentive Stock Option or a Nonstatutory Option, and (iii) such
terms and conditions consistent with the Plan as the Committee shall determine.


 


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(b)           Duration of Option.  Each option may be exercised only during the
Option Period.  At the end of the Option
Period the Option shall expire.


 


(c)           Option
Exercisability.  Unless otherwise
provided by the Committee, each Option shall be exercisable only as to no more
than one-fourth (1/4) of the total number of Shares covered by the Option
during each twelve-month period commencing twelve months after the Date of
Grant of the Option.  Notwithstanding the
foregoing, an Option is exercisable only if the issuance of Shares pursuant to
the exercise would be in compliance with applicable securities laws, as
contemplated by Section 11 of this Plan. 
To the extent an Option is either unexercisable or unexercised, the
unexercised portion shall accumulate until the Option both becomes exercisable
and is exercised but in no case beyond the Option Period; provided, however,
that the unexercisable portion of an Option shall immediately expire upon an
Optionee’s termination of Continuous Service for any reason.


 


(d)           Acceleration of
Vesting.  Subject to the provisions
of Section 8(b), the Board may, in its discretion, provide for the
exercise of Options either as to an increased percentage of Shares per year or
as to all remaining Shares.  Such
acceleration of vesting may be declared by the Board at any time before the end
of the Option Period, including, if applicable, upon a Change of Control or
after termination of the Optionee’s Continuous Service by reason of death,
disability, retirement or termination of employment.


 


(e)           Option Price.  Except as provided in Section 8(a) and
9, the Option price of each Share subject to the Option shall be no less than
the Fair Market Value of the Share on the Option’s Date of Grant.


 


(f)            Termination of
Services without Cause.  If the
Optionee ceases Continuous Service for any reason other than a termination by
the Company for Cause or due to the death, disability, or retirement on or
after the age of 65 of the Optionee, the Option shall lapse at the earlier of (i) the
end of the Option Period or (ii) ten days following the last day that the
Optionee is employed by the Company, or the effective date of the termination
of his services to the Company; provided, however, that the Option may be
exercised only for the number of Shares for which it could have been exercised
on such termination date, subject to any adjustment under Sections 7(d) and
13.  The Committee may, in its
discretion, extend the time during which the Option may be exercised after
termination of service.  Any such Option
shall lapse at the end of the period established by the Committee for exercise
after termination of services.


 


(g)           Termination of
Services for Cause.  Unless otherwise
provided by the Committee, if the Company terminates the Optionee’s Continuous
Service for Cause, all Options held by the Optionee shall lapse immediately
following the last day that the Optionee is employed by the Company, or the
effective date of the termination of his services to the Company.  The Option may be exercised on such
termination date, subject to any adjustment under Sections 7(d) and 13.


 


(h)           Death.  Unless otherwise provided by the Committee,
in the case of the death of the Optionee, the beneficiaries designated by the
Optionee shall have from the earlier of 


 


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(i) one year from the Optionee’s demise
or (ii) the end of the Option Period, to exercise the Option; provided,
however, that the Option may be exercised only for the number of Shares for
which it could have been exercised at the time the Optionee died, subject to
any adjustment under Sections 7(d) and 13.


 


(i)            Retirement.  Unless otherwise provided by the Committee,
if the Optionee retires on or after attaining age 65, the Option shall lapse at
the earlier of (i) the end of the Option Period or (ii) three months
after the date of retirement; provided, however, that the Option may be
exercised only for the number of Shares for which it could have been exercised
on the retirement date, subject to any adjustment under Sections 7(d) and
13.


 


(j)            Disability.  In the event of the Optionee’s termination of
Continuous Service due to total and permanent disability (within the meaning of
Section 422 of the Code), the Option shall lapse at the earlier of (i) the
end of the Option Period or (ii) twelve months after the date of such
termination; provided, however, that the Option may be exercised only for the
number of Shares for which it could have been exercised at the time the
Optionee became disabled, subject to any adjustment under Sections 7(d) and
13.


 


8.             Incentive Stock
Options.  Any Options intended to
qualify as an Incentive Stock Option shall satisfy the following requirements
in addition to the other requirements of the Plan:


 


(a)           Ten Percent
Stockholders.  An Option intended to
qualify as an Incentive Stock Option granted to an Employee who, on the Date of
Grant, owns stock possessing more than 10% of the total combined voting power
of all classes of stock of either the Company or any Parent or Subsidiary,
shall be granted at a price of 110% of Fair Market Value on the Date of Grant
and shall be exercised only during the five-year period immediately following
the Date of Grant.  In calculating stock
ownership of any person, the attribution rules of Section 424(d) of
the Code will apply.  Furthermore, in
calculating stock ownership, any stock that the Employee may purchase under
outstanding options will not be considered.


 


(b)           Maximum Option
Grants.  For Incentive Stock Options,
the aggregate Fair Market Value, determined on the Date of Grant, of stock in
the Company exercisable for the first time by an Optionee during any calendar
year, under the Plan and all other plans of the Company or its parent or
Subsidiaries (within the meaning of Subsection (d) of Section 422 of
the Code) in any calendar year shall not exceed $100,000; provided, however,
that if the vesting of Options is accelerated pursuant to Section 7(d),
there shall be no upper limit as to the Fair Market Value of stock in the
Company exercisable for the first time by an Optionee during any calendar year.


 


(c)           Exercise of
Incentive Stock Options.  Any
Optionee who disposes of Shares acquired upon the exercise of an Incentive
Stock Option either (i) within two years after the Date of Grant of such
Incentive Stock Option or (ii) within one year after the transfer of such
Shares to the Optionee, shall notify the Company of such disposition and of the
amount realized upon such disposition.


 


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9.             Nonstatutory
Options.  Any Option not intended to
qualify as an Incentive Stock Option shall be a Nonstatutory Option.  Nonstatutory Options shall satisfy each of
the requirements of Section 7 of the Plan.


 


10.           Method of Exercise.  An Option granted under this Plan shall be
deemed exercised when the person entitled to exercise the Option (i) delivers
written notice to the Company of the decision to exercise, (ii) concurrently
tenders to the Company full payment for the Shares to be purchased pursuant to
the exercise, and (iii) complies with such other reasonable requirements
as the Committee establishes pursuant to paragraph 11 of the Plan.  During the lifetime of the Optionee, such
Option may be exercised only by him.  Payment
for Shares with respect to which an Option is exercised may be (a) in cash
or by certified check, (b) wholly or partially in the form of Common Stock
held by the Optionee for at least six months having a Fair Market Value equal
to the aggregate Option price or (c), if there is a public market for Shares at
such time, through the delivery of irrevocable instructions to a broker to sell
Shares obtained upon the exercise of the Option and to deliver promptly to the
Company an amount out of the proceeds of such sale equal to the aggregate
Option price for Shares being purchased. 
No Person will have the rights of a stockholder with respect to Shares
subject to an Option granted under this Plan until a certificate or
certificates for the Shares have been delivered to him.


 


An Option granted under this
Plan may be exercised in increments of not less than 10% of the full number of
Shares as to which it can be exercised. 
A partial exercise of an Option will not affect the holder’s right to
exercise the Option from time to time in accordance with this Plan as to the
remaining Shares subject to the Option.


 


11.           Taxes, Compliance
with Law; Approval of Regulatory Bodies. 
The Company, if necessary or desirable, may pay or withhold the amount
of any tax attributable to any Shares deliverable or amounts payable under this
Plan, and the Company may defer making delivery or payment until it is
indemnified to its satisfaction for the tax. 
Options are exercisable, and Shares can be delivered and payments made
under this Plan, only in compliance with all applicable federal and state laws
and regulations, including, without limitation, state and federal securities
laws, and the rules of all stock exchanges on which the Company’s stock is
listed at any time.  An Option is exercisable
only if either (i) a registration statement pertaining to the Shares to be
issued upon exercise of the Option has been filed with and declared effective
by the Securities and Exchange Commission and remains effective on the date of
exercise, or (ii) an exemption from the registration requirements of
applicable securities laws is available. 
This Plan does not require the Company, however, to file such
registration statement or to assure the availability of such exemptions.  Any certificate issued to evidence Shares
issued under the Plan may bear such legends and statements, and shall be
subject to such transfer restrictions, as the Committee deems advisable to
assure compliance with federal and state laws and regulations and with the
requirements of this Section 11. 
Each Option may not be exercised, and Shares may not be issued under
this Plan, until the Company has obtained the consent or approval or every
regulatory body, federal or state, having jurisdiction over such matters as the
Committee deems advisable.


 


Each person who acquires the
right to exercise an Option by bequest or inheritance may be required by the
Committee to furnish reasonable evidence of ownership of 


 


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the Option as a condition to his exercise of
the Option.  In addition, the Committee
may require such consents and release of taxing authorities as the Committee
deems advisable.


 


12.           Amendment.  (a) The Committee may without further
action by the stockholders of the Company and without receiving further
consideration from the Optionees, amend this Plan or condition or modify
Options awarded under this plan in response to changes in securities or other
laws or rules, regulations or regulatory interpretations thereof applicable to
this Plan or to comply with stock exchange rules or requirements.


 


(b)           The Committee may at
any time and from time to time terminate or modify or amend the Plan in any
respect.  The termination or any
modification or amendment of the Plan, except as provided in subsection (a),
shall not, without the consent of an Optionee, impair his rights under an
Option previously granted to him pursuant to this Plan.


 


13.           Adjustment Upon
Change of Shares.  If a
reorganization, merger, consolidation, reclassification, recapitalization,
combination or exchange of share, stock split, stock dividend, rights offering,
or other similar transaction or event occurs, the number, class and/or kind of
Shares for which Options are authorized to be granted under this Plan, the number,
class or kind of Shares then subject to Options previously granted under this
Plan, the price per Share payable upon exercise of each Option outstanding
under this Plan and/or any other affected term of an Option shall be equitably
adjusted by the Committee to reflect such changes.  To the extent deemed equitable and
appropriate by the Board, subject to any required action by stockholders, in
any merger, consolidation, reorganization, liquidation or dissolution, any
Option granted under the Plan shall pertain to the securities and other
property to which a holder of the number of Shares of stock covered by the
Option would have been entitled to receive in connection with such event.


 


14.           Liability of the
Company.  The Company, its parent and
any Subsidiary that is in existence or hereafter comes into existence shall not
be liable to any person for any tax consequences expected but not realized by
an Optionee or other person due to the exercise of an Option.


 


15.           Expenses of Plan.  The Company shall bear the expenses of
administering the Plan.


 


16.           Duration of Plan.  Options may be granted under this Plan only
within 10 years from the effective date of this Plan.


 


17.           Applicable Law.  The validity, interpretation, and enforcement
of this Plan are governed in all respects by the laws of Delaware, without
regard to the conflict of laws provisions hereof.


 


18.           Effective Date.  The effective date of this Plan shall be the
date this Plan is adopted by the Board, or such later date as designated by the
Board.


 


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19.           Securities Laws.  The Plan and the administration of the Plan
are intended to comply with all applicable conditions of Rule 16b-3 or any
successor regulation or statute adopted under the federal securities laws.  To the extent any provision of the Plan or
action by the Board or the Committee fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by the
Committee.


 


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